What is PIP and how do I calculate it?

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Aitrus
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Re: What is PIP and how do I calculate it?

Post by Aitrus »

Hmm, not sure where the math hiccup is then.

I don't really pay attention to the PIP anyway. Other than for a small pat on the back for how I've done over the past year, I don't pay it much mind. There's other things that are more worth worrying over in my TSP account / seasonal strategy.
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evilanne
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Re: What is PIP and how do I calculate it?

Post by evilanne »

Mr Snrub,
Go to your TSP account and look at the Activity Summary and see if your loan payments are included in the Contributions and Additions. Then change the Period to 01/01/2016 thru 12/31/2016 and compare the numbers to your calculated numbers.

Change period to 03/01/2016 to 02/28/2017 and divide your Total Gain by (Beginning Balance + half of Contributions and Additions) and compare that to the latest PIP listed below on Account Balance page that recently posted. This should give you a better understanding of how they handle your loan payments

MrSnrub
Posts: 106
Joined: Sun Jun 26, 2016 8:21 am

Re: What is PIP and how do I calculate it?

Post by MrSnrub »

evilanne wrote:Mr Snrub,
Go to your TSP account and look at the Activity Summary and see if your loan payments are included in the Contributions and Additions. Then change the Period to 01/01/2016 thru 12/31/2016 and compare the numbers to your calculated numbers.

Change period to 03/01/2016 to 02/28/2017 and divide your Total Gain by (Beginning Balance + half of Contributions and Additions) and compare that to the latest PIP listed below on Account Balance page that recently posted. This should give you a better understanding of how they handle your loan payments


Yes, the loan payments are included in Contributions and Additions. The numbers are exactly the same.


Total Gain: $13,151.21
Beginning Balance: $56,478.24
Contributions and Additions: $26,608.40

Total Gain / (Beginning Balance + 0.5 * Contributions and Additions) =

13151.21 / (56478.24 + (0.5)(26608.40) =
13151.21 / 69782.44358 =
18.846%

The actual PIP posted on the Account Balance page is 20.01%. The PIP I calculated earlier was 18.90%, slightly more accurate than this, but still off by over a percentage point.
Nobody knows what the market is going to do in the future. Stop asking. Just shut up and follow strategy #72033 to glory.

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evilanne
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Re: What is PIP and how do I calculate it?

Post by evilanne »

Appears they may be including all of the loan payments in the divisor (weighting it 100% or more) to calculate your earnings rather than factoring everything as your are.

MrSnrub
Posts: 106
Joined: Sun Jun 26, 2016 8:21 am

Re: What is PIP and how do I calculate it?

Post by MrSnrub »

So TSPers without any current outstanding loan payments the formula will work 100% accurately? It's only the loan payments that are causing the discrepancy?
Nobody knows what the market is going to do in the future. Stop asking. Just shut up and follow strategy #72033 to glory.

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evilanne
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Re: What is PIP and how do I calculate it?

Post by evilanne »

Mine has always been pretty accurate within < a 10th of 1% Calculation today was right on but I retired early last year and had very little in addition column and no withdrawals.

I went back and looked at my annual statements from 2014-2016 and my calculations using the data on the statement vary slightly from their calculation--difference ranged from 0.02% to 0.09% but when I was working full time, I just took 1/2 of the contributions rather than weighting each contribution which could contribute to any difference. Close enough in my book.

MrSnrub
Posts: 106
Joined: Sun Jun 26, 2016 8:21 am

Re: What is PIP and how do I calculate it?

Post by MrSnrub »

Well it took me over two months, but I am happy to report that I have found the solution. You have to use the Monthly Modified Dietz Rate of Return, where the weighted period is only one month, not the entire year. Here is a revised version of the same breakdown as in my previous post (1/1/2016 - 12/31/2016):

Monthly Return = (Monthly Ending Balance - Monthly Beginning Balance - Sum of all Cash Flows)/(Beginning Monthly Balance + Sum(all month's Cash Flows * Weights))

Code: Select all

Beginning Balance (12/31/2015):    $56,052.27

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
1/14/16    Agency Automatic (1%)    28.58     31               14             0.548387097    15.67290323
1/14/16    Agency Match (4%)       114.31     31               14             0.548387097    62.68612903
1/14/16    Employee Contribution   693.00     31               14             0.548387097    380.0322581
1/15/16    Loan Payment            169.03     31               15             0.516129032    87.24129032
1/28/16    Agency Automatic (1%)    30.05     31               28             0.096774194    2.908064516
1/28/16    Agency Match (4%)       120.19     31               28             0.096774194    11.63129032
1/28/16    Employee Contribution   693.00     31               28             0.096774194    67.06451613
1/29/16    Loan Payment            169.03     31               29             0.064516129    10.90516129
    Monthly Cash Flow Sum       $2,017.19
    Monthly Ending Balance     $54,471.46
    Monthly Return Numerator   ($3,598.00)
    Monthly Return Denominator $56,690.41
    Monthly Return                 -6.35%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
2/11/16    Agency Automatic (1%)    30.05     29               11             0.620689655    18.65172414
2/11/16    Agency Match (4%)       120.19     29               11             0.620689655    74.60068966
2/11/16    Employee Contribution   693.00     29               11             0.620689655    430.137931
2/12/16    Loan Payment            169.03     29               12             0.586206897    99.08655172
2/25/16    Agency Automatic (1%)    30.76     29               25             0.137931034    4.242758621
2/25/16    Agency Match (4%)       123.04     29               25             0.137931034    16.97103448
2/25/16    Employee Contribution   693.00     29               25             0.137931034    95.5862069
2/26/16    Loan Payment            169.03     29               26             0.103448276    17.48586207
    Monthly Cash Flow Sum       $2,028.10
    Monthly Ending Balance     $56,478.24
    Monthly Return Numerator      ($21.32)
    Monthly Return Denominator $55,228.22
    Monthly Return                 -0.04%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
3/10/16    Agency Automatic (1%)    30.76     31               10             0.677419355    20.83741935
3/10/16    Agency Match (4%)       123.04     31               10             0.677419355    83.34967742
3/10/16    Employee Contribution   693.00     31               10             0.677419355    469.4516129
3/11/16    Loan Payment            169.03     31               11             0.64516129     109.0516129
3/24/16    Agency Automatic (1%)    30.76     31               24             0.225806452    6.945806452
3/24/16    Agency Match (4%)       123.04     31               24             0.225806452    27.78322581
3/24/16    Employee Contribution   693.00     31               24             0.225806452    156.483871
3/28/16    Loan Payment            169.03     31               28             0.096774194    16.35774194
    Monthly Cash Flow Sum       $2,031.66
    Monthly Ending Balance     $62,390.95
    Monthly Return Numerator    $3,881.05
    Monthly Return Denominator $57,368.50
    Monthly Return                  6.77%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
4/7/16     Agency Automatic (1%)    30.76     30                7             0.766666667    23.58266667
4/7/16     Agency Match (4%)       123.04     30                7             0.766666667    94.33066667
4/7/16     Employee Contribution   693.00     30                7             0.766666667    531.3
4/8/16     Loan Payment            169.03     30                8             0.733333333    123.9553333
4/21/16    Agency Automatic (1%)    30.76     30               21             0.3            9.228
4/21/16    Agency Match (4%)       123.04     30               21             0.3            36.912
4/21/16    Employee Contribution   693.00     30               21             0.3            207.9
4/22/16    Loan Payment            169.03     30               22             0.266666667    45.07466667
    Monthly Cash Flow Sum       $2,031.66
    Monthly Ending Balance     $64,663.83
    Monthly Return Numerator      $241.22
    Monthly Return Denominator $63,463.23
    Monthly Return                  0.38%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
5/5/16     Agency Automatic (1%)    30.76     31                5             0.838709677    25.79870968
5/5/16     Agency Match (4%)       123.04     31                5             0.838709677    103.1948387
5/5/16     Employee Contribution   693.00     31                5             0.838709677    581.2258065
5/6/16     Loan Payment            169.03     31                6             0.806451613    136.3145161
5/19/16    Agency Automatic (1%)    30.76     31               19             0.387096774    11.90709677
5/19/16    Agency Match (4%)       123.04     31               19             0.387096774    47.6283871
5/19/16    Employee Contribution   693.00     31               19             0.387096774    268.2580645
5/20/16    Loan Payment            169.03     31               20             0.35483871     59.9783871
    Monthly Cash Flow Sum    $2,031.66
    Monthly Ending Balance    $67,910.39
    Monthly Return Numerator    $1,214.90
    Monthly Return Denominator    $65,898.14
    Monthly Return    1.84%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
6/2/16     Agency Automatic (1%)    30.76     30                2             0.933333333    28.70933333
6/2/16     Agency Match (4%)       123.04     30                2             0.933333333    114.8373333
6/2/16     Employee Contribution   693.00     30                2             0.933333333    646.8
6/3/16     Loan Payment            169.03     30                3             0.9            152.127
6/16/16    Agency Automatic (1%)    30.76     30                16            0.466666667    14.35466667
6/16/16    Agency Match (4%)       123.04     30                16            0.466666667    57.41866667
6/16/16    Employee Contribution   693.00     30                16            0.466666667    323.4
6/17/16    Loan Payment            169.03     30                17            0.433333333    73.24633333
6/30/16    Agency Automatic (1%)    30.76     30                30            0              0
6/30/16    Agency Match (4%)       123.04     30                30            0              0
6/30/16    Employee Contribution   693.00     30                30            0              0
    Monthly Cash Flow Sum    $2,878.46
    Monthly Ending Balance    $71,537.79
    Monthly Return Numerator    $748.94
    Monthly Return Denominator    $69,321.28
    Monthly Return    1.08%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
7/1/16     Loan Payment            169.03     31                1             0.967741935    163.5774194
7/14/16    Agency Automatic (1%)    30.76     31                14            0.548387097    16.8683871
7/14/16    Agency Match (4%)       123.04     31                14            0.548387097    67.47354839
7/14/16    Employee Contribution   693.00     31                14            0.548387097    380.0322581
7/15/16    Loan Payment            169.03     31                15            0.516129032    87.24129032
7/28/16    Agency Automatic (1%)    30.76     31                28            0.096774194    2.976774194
7/28/16    Agency Match (4%)       123.04     31                28            0.096774194    11.90709677
7/28/16    Employee Contribution   693.00     31                28            0.096774194    67.06451613
7/29/16    Loan Payment            169.03     31                29            0.064516129    10.90516129
    Monthly Cash Flow Sum    $2,200.69
    Monthly Ending Balance    $75,850.68
    Monthly Return Numerator    $2,112.20
    Monthly Return Denominator    $72,345.84
    Monthly Return    2.92%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
8/11/16    Agency Automatic (1%)    30.76     31                11            0.64516129     19.84516129
8/11/16    Agency Match (4%)       123.04     31                11            0.64516129     79.38064516
8/11/16    Employee Contribution   693.00     31                11            0.64516129     447.0967742
8/12/16    Loan Payment            169.03     31                12            0.612903226    103.5990323
8/25/16    Agency Automatic (1%)    30.76     31                25            0.193548387    5.953548387
8/25/16    Agency Match (4%)       123.04     31                25            0.193548387    23.81419355
8/25/16    Employee Contribution   693.00     31                25            0.193548387    134.1290323
8/26/16    Loan Payment            169.03     31                26            0.161290323    27.26290323
    Monthly Cash Flow Sum    $2,031.66
    Monthly Ending Balance    $77,798.83
    Monthly Return Numerator    ($83.51)
    Monthly Return Denominator    $76,691.76
    Monthly Return    -0.11%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
9/8/16     Agency Automatic (1%)    30.76     30                8             0.733333333    22.55733333
9/8/16     Agency Match (4%)       123.04     30                8             0.733333333    90.22933333
9/8/16     Employee Contribution   693.00     30                8             0.733333333    508.2
9/9/16     Loan Payment            169.03     30                9             0.7            118.321
9/22/16    Agency Automatic (1%)    30.76     30                22            0.266666667    8.202666667
9/22/16    Agency Match (4%)       123.04     30                22            0.266666667    32.81066667
9/22/16    Employee Contribution   693.00     30                22            0.266666667    184.8
9/23/16    Loan Payment            169.03     30                23            0.233333333    39.44033333
    Monthly Cash Flow Sum    $2,031.66
    Monthly Ending Balance    $79,802.41
    Monthly Return Numerator    ($28.08)
    Monthly Return Denominator    $78,803.39
    Monthly Return    -0.04%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
10/6/16    Agency Automatic (1%)    30.76     31                6             0.806451613    24.80645161
10/6/16    Agency Match (4%)       123.04     31                6             0.806451613    99.22580645
10/6/16    Employee Contribution   693.00     31                6             0.806451613    558.8709677
10/7/16    Loan Payment            169.03     31                7             0.774193548    130.8619355
10/20/16    Agency Automatic (1%)   30.76     31                20            0.35483871     10.91483871
10/20/16    Agency Match (4%)      123.04     31                20            0.35483871     43.65935484
10/20/16    Employee Contribution  693.00     31                20            0.35483871     245.9032258
10/21/16    Loan Payment           169.03     31                21            0.322580645    54.52580645
    Monthly Cash Flow Sum    $2,031.66
    Monthly Ending Balance    $80,441.75
    Monthly Return Numerator    ($1,392.32)
    Monthly Return Denominator    $80,971.18
    Monthly Return    -1.72%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
11/3/16    Employee Contribution   693.00     30                3             0.9            623.7
11/3/16    Agency Automatic (1%)    30.76     30                3             0.9            27.684
11/3/16    Agency Match (4%)       123.04     30                3             0.9            110.736
11/4/16    Loan Payment            169.03     30                4             0.866666667    146.4926667
11/17/16    Employee Contribution  693.00     30                17            0.433333333    300.3
11/17/16    Agency Automatic (1%)   30.76     30                17            0.433333333    13.32933333
11/17/16    Agency Match (4%)      123.04     30                17            0.433333333    53.31733333
11/18/16    Loan Payment           169.03     30                18            0.4            67.612
    Monthly Cash Flow Sum       $2,031.66
    Monthly Ending Balance     $86,692.34
    Monthly Return Numerator    $4,218.93
    Monthly Return Denominator $81,784.92
    Monthly Return                  5.16%

Date       Description             Amount     Days in Month    Day of Month   Weight         Time-Weighted Cash Flow
12/1/16    Employee Contribution   693.00     31                1             0.967741935    670.6451613
12/1/16    Agency Automatic (1%)    30.76     31                1             0.967741935    29.76774194
12/1/16    Agency Match (4%)       123.04     31                1             0.967741935    119.0709677
12/2/16    Loan Payment            169.03     31                2             0.935483871    158.1248387
12/15/16    Employee Contribution  693.00     31                15            0.516129032    357.6774194
12/15/16    Agency Automatic (1%)   30.76     31                15            0.516129032    15.87612903
12/15/16    Agency Match (4%)      123.04     31                15            0.516129032    63.50451613
12/16/16    Loan Payment           169.03     31                16            0.483870968    81.78870968
12/29/16    Employee Contribution  675.00     31                29            0.064516129    43.5483871
12/29/16    Agency Automatic (1%)   30.76     31                29            0.064516129    1.984516129
12/29/16    Agency Match (4%)      123.04     31                29            0.064516129    7.938064516
12/30/16    Loan Payment           169.03     31                30            0.032258065    5.452580645
    Monthly Cash Flow Sum       $3,029.49
    Monthly Ending Balance     $89,854.59
    Monthly Return Numerator      $132.76
    Monthly Return Denominator $88,247.72
    Monthly Return                  0.15%            


Therefore, the total PIP is (1 + JanuaryPIP)(1 + FebPIP)(1 + MarchPIP) ... (1 + NovemberPIP)(1 + DecemberPIP) - 1.

Code: Select all

PIP = (1 - 0.06346375)(1 - 0.000386)(1 + 0.067651236)(1 + 0.003800941)(1 + 0.01843603)(1 + 0.010803897)(1 + 0.029195875)(1 - 0.001088904)(1 - 0.001088904)(1 - 0.017195254)(1 + 0.05158567)(1 + 0.001504401) - 1
PIP = 0.098671065 = 9.8671065%


...which is exactly my Personal Investment Performance for the last twelve months ending 12/31/2016 as posted on the TSP website and on my quarterly statement! Yay!!!
Nobody knows what the market is going to do in the future. Stop asking. Just shut up and follow strategy #72033 to glory.

User avatar
repinda808
Posts: 209
Joined: Fri Sep 13, 2013 3:18 pm

Re: What is PIP and how do I calculate it?

Post by repinda808 »

MrSnrub,

I'm glad you found your answer. Great job!
2020 Seasonal Strategy 86299

User avatar
evilanne
Posts: 2067
Joined: Thu May 14, 2015 6:52 pm

Re: What is PIP and how do I calculate it?

Post by evilanne »

Will it work for outflows if you take a loan if you are still working or monthly payments for retirees?

MrSnrub
Posts: 106
Joined: Sun Jun 26, 2016 8:21 am

Re: What is PIP and how do I calculate it?

Post by MrSnrub »

I can't verify that it works for monthly payments for retirees, but it does work for loan disbursements and repayments. I took out a loan several months ago, and I calculated my PIP for every month since I started work as a Fed, and the numbers match up exactly on all of my yearly statements.
Nobody knows what the market is going to do in the future. Stop asking. Just shut up and follow strategy #72033 to glory.

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Fund Prices2024-03-28

FundPriceDayYTD
G $18.15 0.05% 1.05%
F $19.08 -0.06% -0.74%
C $82.21 0.11% 10.55%
S $82.43 0.30% 6.92%
I $42.57 -0.24% 5.95%
L2065 $16.38 0.02% 8.37%
L2060 $16.39 0.02% 8.38%
L2055 $16.39 0.02% 8.38%
L2050 $32.73 0.01% 6.95%
L2045 $14.91 0.02% 6.58%
L2040 $54.38 0.02% 6.22%
L2035 $14.34 0.02% 5.79%
L2030 $47.67 0.02% 5.38%
L2025 $13.15 0.03% 3.43%
Linc $25.61 0.03% 2.82%

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Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".